Note the red line on SPY daily bars…the SPY’s current level. The channel that has provided support and resistance since August has actually been reliable for traders..excepting a few gut wrenching days when it looked like the abyss was just a mouse click away. Previous bounces off the resistance line have been characterized by hairy top bars followed by dramatic retracements back to 50% fib lines. What’s different in the most recent run-up is the sheer unbroken positive momentum leading to today’s pop. OP-EX weeks tend to be volatile so we may get a little pause here before the next trend reveals itself.
On the other hand, any new crisis, real or imagined, is likely to push the markets down in previous fashion. Today’s closing action may be the best harbinger of next week’s possibilities but news surprises continue to drive the markets in conjunction with earnings reports.
